Bank of Valletta could be held to account for Deiulemar’s fraudulent bankruptcy

London: Italian dry bulk giant Deiulemar fraudently declared bankruptcy in 2012, owing over €800m, and now its financiers are facing legal action in the fallout.

A €363m civil claim has been filed in an Italian court against trusts held by Malta’s Bank of Valletta (BOV) by Deiulemar’s liquidators and representatives of 13,000 bondholders from the Italian town of Torre del Greco, MaltaToday reports.

The claim has also been filed against trusts held by Banco Svizzero d’Italia Trust Corporation Limited Malta, owned by Swiss bank BSI and registered at the BOV’s address in Valletta.

Seven members of Deiulema’s three founding families were jailed in July 2014 for up to 17 years for fraudulent bankruptcy.

The seven illegally transferred company assets to trusts in Malta, Switzerland, and the British Virgin Islands to avoid their exposure to creditors and the 13,000 retail investors from Torre del Greco, who had their savings wiped out.

Liquidators filed the claim in Italy against BOV in February 2014, followed by a further “quantifiable” claim in November.

The BOV has subsequently launched an investigation into the due diligence the bank conducted while offering trust services to Deiulemar via its Trust Capital Trust, Trust Gaino, and Trust Gilda.

The BOV says it has appointed an Italian legal firm to represent it in court in Italy. Its lawyers told the bank in April that it has a “strong legal position” and no provision was necessary at this stage.

The bank has also sought the advice of its auditors, legal consultants and informed its regulators and European Central Bank officials.